The customer-centric business model is a necessary hybrid delivery system of goods and services in today's business environment. With the advent of the Internet, and e-business, customers are no longer limited by traditional geographic parameters for their purchase choices. Other factors which established boundaries to the consumer's choices, such as limited knowledge of purchase options, and time constraints, or the inability to travel, and research options before making a purchase choice have been dissolved.
Today's consumer is driving the marketplace in much more powerful ways, since he or she can sit at a desktop computer, and become aware of the options, prices, and product selection in minutes. Armed with this power, the retailer, or provider of good and services that are not also in touch with the advancing level of consumers desires will be left with full shelves, few customers, and falling revenues. Customers will find either e-businesses who meet their needs or traditional brick or mortar business which develop a hybrid product delivery system, and meet the customer at his point need, rather than demand the customer come to him. In this environment, my expectation regarding the level of business service I will receive is very high. I have come to expect a business to be in stock, and have competitive prices on the goods for which I am shopping. I expect service personnel to be knowledgeable, available, and ready to help with whatever my questions may be.
Recently, while traveling and working out of town, I experienced not one, but three retail stores which should examine their commitments to their customers. I needed a small part for a home improvement project which was available at every hardware store and home improvement store in my home town.
At the first small hardware store, the manager smiled when I asked for the products, and said that he has just ordered a display, and that the products in question would be arriving in a week or two. I would be finished with my project in 2 days, so the benefit I would receive from his "eventually" inventory control method was beyond me. As a customer, it is or no value to have a product next week, or next month, or even the next day. When I am present in a retail store, I have a need, and have the money. If the retailer does not have the products, I will take my purchasing power elsewhere. I frequent this type of store often, and can easily identity those which will be in business in the coming months and years. On my way out of the building, I noticed a "building for sale" sign on the building. I made a mental note, and in light of the business operations inside, I was not surprised that the building would be sold out from underneath the current tenants.
My frustration grew, however, when I drove a few blocks to a large national chain store, and found the same conditions. Out of stock products, products without prices on the display floor, and staff that did not know where to find what I was asking for only added to my frustration. In what ways are these stores serving their customers? Had I complained, would it have done any good? From the blank stares I received from the sales floor staff when asking for a common item, I doubt that addressing the manager about my dissatisfaction would have made any positive contribution to the situation. I was disappointed, and after two fruitless expeditions, I returned to the work site, and made a list of products to pick up when I returned home.
In today's computer driven business environment, organizations who respond to their customers needs with this level of disregard will not be in business for long. The customer, myself in this case, is aware of business standards which are set in other communities, cities, and states. With the power of computer driven inventory replacement and JIT (just in time) inventory delivery services, situations in which a retail store is out of stock on a common item should be virtually eliminated from day-to-day business practices.
What made this situation more intolerable for me, as a customer, is that I personally managed many hardlines retail stores and departments in large chain stores. My personal commitment to my customers was that I would be in stock on every item at all times. Many times I used personal transportation to travel to warehouses and pick up needed merchandise. If my customer walked into my store, and I did not have the merchandise he or she needed, I accepted the responsibility as a personal failure. This is the kind of commitment I made to my customer, and it is the same commitment I expect from retail organizations today.
Maintaining this level of commitment is one of the ways to make sure each customer is walked into a relationship marketing and managing experience. The most expensive and difficult step in the selling process if obtaining new customers. Landing the customer is the first step. A company's advertising budget, store decor and the reputation the company builds in the community are all constructed with the purpose of drawing new customers into the front doors. Once a customer approaches, the business that does not have the products or services which the customer expects is committing a mortal sin, and has wasted the investment they have made. The second step in CRM is satisfying their immediate needs by having the right product or service at the right price. Without this step, the new customer has no reason to return. The next step in managing customer relationships is retaining the customer by serving their needs and service issues. Most business transactions are not completed in a single transaction. Questions and service issues arise which means the business must have system in place to address these ongoing needs if they expect to serve their customers desires.
Finally, reinforcing the relationship by enhancing the purchasing experience will create an environment which the customer will be unlikely to leave. Add-on and related products enhance the client relationship, as do warrantees, promotional sales for existing clients, etc. Ultimately, both parties benefit from the ongoing nature of the relationship. The client benefits by knowing his or her needs are understood and met, and the business benefits by building a solid, and highly loyal customer base.
Some of my most pleasant customer service experiences have occurred on the internet. When purchasing online items, I am highly pleased with companies such as eBay which have used technology to put buyers together with sellers to create a global marketplace. The east at which I can find items, purchase them, and then pay for the items with ease creates a pleasant shopping experience.
A second online shopping experience with which I am very pleased is shopping for airline tickets. I recently purchased tickets from SouthWest Airlines from their web site. I was able to select my arrival and departure times based on flexibility in my schedule and the desired travel times as well as days. I was able to step up to the gate, and board the flight without any delay, or additional check in procedures in the airport. Because the entire process was organized and effective, offering me choice and flexibility, I felt that I was in control of my purchase, and therefore happy with my arrangements.
Any customer-centric business model which does not integrate methods for interactive feedback with its customers will likely be quickly outpaced by changed in the marketplace. The technology has been created by those who specialize in the techno-intrinsic gadgets. The business need only utilize the technology. The great beauty of interactive marketing is the ability to track, measure, and respond to customers' unspoken wishes. Using analytics programs to capture the data derived from that capability organizations can create a much more successful and customer-centric business.
In a market economy, business managers are concerned with making a profit, but the guiding principle of business economics is not the maximization of profits by minimizing costs, it is the avoidance of loss, argued Peter Drucker, management guru and economist. "It is the first duty of a business to survive. This is not to say that profits are unimportant." An enterprise must make enough to cover future risks and to enable it to stay in business. Many firms miss this point. In cutting costs to maximize profits, they liquidate assets and under-invest in innovation
Drucker suggests there is only one valid definition of business purpose: to create a customer. "It is the customer who determines what a business is. What the customer thinks he is buying, what he considers 'value,' is decisive."
Because in a technologically enhanced global economy, the customer can take his purchasing power to another vendor as the result of one bad customer service experience. The customer is no longer confined to the shops in his neighborhood, or town.